Question

answer is not 20.50

Appendix Chapter OUGUEU TIM Check my work Part 2 of 2 Required information The following information applies to the questions displayed below) George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company's products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks 1.57 points Week Units Total Etching Cost Book For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week 3. If the company processes five units next week, what would be the expected total etching cost? (Round your intermediate calculations and final answer to 2 decimal places.) Expected total etching cost $ 2050

Answer 1

Calculation of variable cost per unit using high-low volume method
= (Higher cost -lower cost )/ (higher volume - lower volume)
=($24-16)/(7-2)
=$8/5
=$1.6 per unit
Total Fixed cost Per week
24 = ($1.6*7) + Fixed cost
Fixed Cost = $12.8
Total etching cost for net week
Variable cost ($1.6*5 units )			$       8.00
Fixed cost			$    12.80
Total Cost			$    20.80
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